Halal Children Savings Accounts

Excellent!! regular investment over a long investment horizon is the way to go :clap: :clap:

Point to note:

  • Asset Class: You have a very long investment horizon so should seriously consider investing in Equity fund(s).
  • Wrapper: Investing via Junior ISA will be tax beneficial as your child can have all the gains tax free when he/she reaches 18. The annual allowance is ÂŁ9,000 for this year.
  • Keep your fees low - Do it for me or Do it yourself ?: There are ready-made portfolios available in the market as you mentioned/shared above. I have not seen all in details but the platform fee charged by some of them are in excess of 1%+ whereas which you can reduce it to 0.25% by investing your self with platform providers such as AJ bell. I am a big advocate of learning how to invest and do it yourself as you will save a lot in middleman fees and their longterm impact is quite high. See if you can spend a few hours and do it your self?. Suggest you see videos 2&4 in the Financial Education: Investment TIPS for Absolute Beginners

Summary:

A simple DIY solution could be as follows (This is not a recommendation and you should do your due diligence)

  1. Know when you need your savings and want to see how much you need to save regularly?. In the gross annual interest rate field, you can assume a 5-6% growth for equity. You can come to this link say annually to see if you have to adjust monthly payments to reach to your goal.

  2. Open a junior ISA @ AJ Bell (They offer the most shariah-compliant funds that I am aware)

  3. Select a fund of your choice. you may find this thread useful. Personally, I would keep it very simple and similar to what redroseassurance are doing as shared by @Investor i.e. investing in the popular HSBC Islamic Global Equity Index “BD” fund. Considering a long term horizon, maybe allocating 10% to iShares MSCI EM Islamic UCITS ETF.

  4. Setup regular investing as a direct debit with the platform.

  5. Sit back and have loads of fun with the little one :slight_smile:

One last point…remember “It’s not about timing the market but its time in the market”: Stay calm and don’t do anything with the volatility in the market (even if it crashes in near future, it will more than likely be a winner in the end). Equity is volatile in nature but outperforms all the other asset classes in long run. Loving your long horizon :slight_smile:

Don’t hesitate to ask if you have any questions.

Good luck!

Jazakallah
Zeeshan

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